Why Many Realtors Should Refer Their Short Sale Listings To Specialists

Dave, well done. I'm licensed and legally able to sell anywhere in my state. Doesn't mean I should. I can do commercial. Doesn't mean I should. 1031 Exchange? Investment property? Horses? Ranch? We can't get ego involved. Refer it and move along. As far as Matt's (#4) coment is concerned, I agree and I disagree with the conclusion. Yes, we need to be educated and expand our horizons. However, someone else's financial future is not the place to roll the dice. Want to learn a new area of expertise? Get together with a real expert, go to school, get a mentor. Don't practice on me! Excellent info

I often am confused when an agent that has no training or experience with short sales walks up to me and says "Hey I'm listing a short sale, can you help me with it? I listed it yesterday, what do I need to do now?" Well duh!

Very well written rationale for why agents should refer their short sales to agents who:

Specialize in Short Sales

Have a List to Close ratio of at least 70% (ours is in the 90% plus range overall and 95.83% for 2010)

Have closed at least 25 Short Sales (we have closed more than 50)

Have the ability to escalate Short Sale files to CEO level at the Seller's Lender if need be

I agree. Unless you are completely familliar with the complexities of listing a short sale, then don't do it, which is why I stay away from them. The problem is, finding someone who actually knows what they're doing. There's a lot of future litigation down the line from angry people who've lost their homes that were not advised properly. Talk to a real estate attorney before talking with a short sale Realtor 'expert".

Not every "expert" should be mirrored or referred to.  Doing something many times does not make every agent great at it.  Some of the agents in my area that are experts and do high volume do sub par work because that is all they have time for.

I personally would prefer a genuine job from someone who has time for me.

A true expert is someone who not only has the experience, but who has learned from each experience and gotten better and better.

I write for a short sale specialist and have learned that there is a whole lot more to being successful at closing short sales than many agents are willing to do.

I agree, although classes aren't necessarily what makes them a specialist.  The worst ss I have had so far was being mitigated by a law firm (she hired prior to listing with me).  You could tell they didn't even understand some of the terms I was using. 

If you are unwilling or unable to stay current with the constantly changing short sale rules and environment then referring is in everyones best interest. The seller gets the best representation and you get a referral fee.

Excellent point, as most would agree. It's a mark of professionalism in this or any industry when someone passes a client to another person because they will be better served this way. It also has a 'karma' aspect to it, as the client will look upon you favorable for putting them in safer hands and will likely reward you down the road, whether directly or indirectly.

I'll also say that there are investors will tons of short sale experience as well that can serve the same role -- not just agents and brokers. Yes, that will bother folks who subscribe to the realtor vs. investor school of thought, but the facts are what the facts are. If the overlying sentiment is that to be an ethical professional is to do what's best for the client, then one has to be open to passing that client on to anyone who can serve them in a short sale situation better than an agent without the tools -- and that person could be an investor as well as an experienced broker.

I definitely agree... Not only because you're right... but because I'm one of the specialists who would benefit ;-)

I agree Dave. Everyone refer their short sales to me!

Dave - Thanks for adding the additional paragraph.  I think it's important for us (as an industry) to encourage the learning process as much as it is to encourage good habits and client-first attitudes.  I actually referred a short sale to another agent in the recent past as I felt I wasn't in the right spot to help these people.  Unfortunately, the transaction turned into a bit of a nightmare for my fellow agent, but they worked hard and knew what they were doing, so I was pleased to have passed it on.

I didn't mention earlier, but I wanted to make note of this section:

Referring a Short Sale Does NOT Indicate Weakness or an Admission of a Shortcoming

We as agents tend to get flustered when we feel inadaquete, weak, or inexperienced.  I see ego get in the way quite a bit.  We need to learn to let go when we could better serve clients by helping them find a different agent.  We're all not experts at the same things.  I recently referred a listing to someone because they were fluent Spanish speakers, something I saw as a marketing bonus for this particular property.  I didn't want to let a listing go, but knew that it was the right thing to do for the benefit of my client.

I was kinda terrified when doing my first one that I would screw up, but hoenstly there is NO short sale "expert" in my MLS.  We've only had a handful in the entire area.  Most homes advertised as "short sales" in our MLS eventually went to foreclosure because agents told sellers they could do that without ever getting the okay from the lender (doh)  But because my market is primarily vacation homes where owners can well afford the payments (even when they are underwater)  I took the class, read the blogs, consulted with the closing attorney & got through it.  The sellers don't owe a defficiency, won't be getting a 1099 on it either.  The buyer is happy and I'd say I've managed to do at least 10% of the short sales in my area since that first one.  But... do I send sellers out of our market?  as there is no "expert" locally.

Dave,

I agree with you about referring out transactions in which we don not have the skill set to properly represent the client. Yes the agents commenting on this post also make a point about how we learn by doing.  Unfortunately, just like many other segments of our industry unless you are going to become a "Commercial agent" for example then I caution you to not take such clients on.   These are all more specialized fields that if you are not going to do these transactions on a ongoing basis then refer them out.  Our duty to represent our clients to act in their best interest is in question if you constantly take on clients that we have no experience or training in. 

Great post Dave.  Short Sales are very complex.  I am closing one on Monday and I will tell you it was not easy.

I have navigated a couple of short sales on my own (1 loan and serious hardship) and have used a professional negotiator for the others.  No two short sales are alike, but I have found that my negotiator has come across alot in her years of handling these and has more tolerance with the banks than me.  Its a win/win.